An Assessment of the Economic Potential of Offshore Wind in the United States from 2015 to 2030

Abstract

1 This analysis excludes Alaska. For Hawaii, estimates of LACE, net value, and economic potential were not calculated because of data limitations. 2 Additional studies that this conceptual approach and methodology is based on include Brown et al. (2015), U.S. Department of Energy (2013), and Lopez et al. (2012). 3 Sea state has been defined as the "overall condition of the surface of a large area of open ocean or sea resulting from the combined effects of wind-generated waves, swells, and surface currents. It is described in terms of how rough the waters are based on wave height." (Canada Department of Environment and Climate Change 2017) 4 The concept of avoided costs has long been used in utility and regulatory economics (see e.g., Public Utility Regulatory Act of 1978, Sec. 210, defining avoided costs as "the incremental cost to an electric utility of electric energy or capacity or both which […] such utility would generate itself or purchase from another source"). This analysis applies a specification that does not necessarily reflect the same complexity that is used for other purposes. Limitations and caveats are discussed in Section 3. vii This report is available at no cost from the National Renewable Energy Laboratory at www.nrel.gov/publications. resource mix, demand patterns, and transmission constraints. The difference between LCOE and LACE at a given location (denoted in this report by "net value") can help inform an initial understanding of the economic potential of a new offshore wind project at a high geospatial resolution. For this analysis, policy-related factors that may influence LACE or LCOE (and hence, the "net value" of a renewable energy project) were not considered explicitly. For instance, renewable energy support mechanisms (e.g., the production tax credit, Renewable Portfolio Standards), energy sector and environmental regulations (e.g., carbon pricing), or benefits from portfolio diversification (Energy Information Administration [EIA] 2015) may increase the "net value" and economic potential. Conversely, regulatory uncertainty and market barriers (see e.g., DOE 2016) may decrease the "net value" and economic potential. 5 A series of data sources and reports were used to derive the assumptions and data for the underlying analysis documented in

Regional Energy Deployment System (ReEDS) Model Documentation: Version 2018

“…Current-day cost data are derived from the published data of the global offshore wind industry as well as estimates from recent development activity on the Atlantic Coast of the United States (Tegen et al 2012;Wiser and Bolinger 2017;NREL 2018b). These data are coupled with engineering assessments and distance-based cost functions (specific to the offshore export cable and incremental construction cost associated with moving farther from shore) to determine expected site-specific costs for technology across a broad range of water depths and distances from shore (Beiter et al 2017).…”

Reaching convergence in United States offshore wind energy research : a multidisciplinary framework for innovation, a white paper authored by the Massachusetts Research Partnership in Offshore Wind

“…For example, technically and economically viable floating offshore wind turbine systems are critical to the U.S. market, where 58% of the offshore wind resource is located in areas with seafloor depths greater than 60m (Figure 14). Such systems will require advanced controls, protection under extreme events, and rotors that are larger and lighter than the current industry standard (James and Costa 2015, Beiter et al 2017, Peeters et al 2017, Gaertner and Lackner 2018. U.S. development of such systems will position the nation to compete in the future global offshore wind market.…”

Offshore Wind Resource, Cost, and Economic Potential in the State of Maine

“…• An Assessment of the Economic Potential of Offshore Wind in the United States from 2015 to 2030 (Beiter et al 2017) • A Spatial-Economic Cost Reduction Pathway Analysis for U.S. Offshore Wind Energy Development from -2030 • Levelized Cost of Energy Analysis using a Floating Concrete Semisubmersible Foundation for the University of Maine (Moné et al 2016 unpublished) • Offshore Wind Energy Resource Assessment for the United States ).…”

“…These studies focused on assessing the "technical" offshore wind resource potential , quantifying the variation in levelized cost of energy (LCOE) in major coastal areas of the United States Beiter et al 2017), and estimating costs for the University of Maine's U.S. Department of Energy (DOE) Advanced Technology Demonstration project, Aqua Ventus (Moné et al 2016). Beiter et al ( , 2017 also include an assessment of the economic potential of fixed-bottom and floating offshore wind technologies in major U.S. coastal areas.…”

“…These studies focused on assessing the "technical" offshore wind resource potential , quantifying the variation in levelized cost of energy (LCOE) in major coastal areas of the United States Beiter et al 2017), and estimating costs for the University of Maine's U.S. Department of Energy (DOE) Advanced Technology Demonstration project, Aqua Ventus (Moné et al 2016). Beiter et al ( , 2017 also include an assessment of the economic potential of fixed-bottom and floating offshore wind technologies in major U.S. coastal areas. The assessment from Moné et al (2016) includes case studies for both the two-turbine pilot project planned for the Monhegan Island demonstration site as well as two hypothetical commercial-scale projects; one using the current Aqua Ventus technology scaled to a 498megawatt (MW) power plant size and another one using mature floating wind technology projected to be available in the 2030 timeframe.…”